Malaysia government agrees to postpone new EMC foreign worker levy

The Malaysia Cabinet has announced on Wednesday to postpone the Employer Mandatory Commitment (EMC) levy until 2018, as reported in The Star Online. Initially to come full force early this year, employers were made responsible to pay for the levy of their foreign workers under the EMC act. With the delay, it allows more time for companies to adjust to the new policy.

In response to this move, Malaysian Employers Federation (MEF) executive director, Datuk Shamsuddin Bardan mentioned that while companies have generally agreed that reliance on foreign workers had to be reduced, they needed time to get used to the EMC.

Bardan commented: “We can hardly absorb the new costs because of the challenging economic situation.”

“The one-year time frame given can be utilised fully to re-look how we manage foreign workers and for the Government to revamp the recruitment system,” he added.

Sharing his opinion on the new development, Datuk Michael Kang, president at SME Association of Malaysia said that the government should “take this time to address the recruitment process of foreign workers”. Currently, this is done via third party agencies that bring in more workers than necessary.

Similarly, Master Builders Association Malaysia (MBAM) also commented in The Sun Daily that it had welcomed the decision to postpone the employers' mandatory levy payment of foreign workers to 2018, adding that it was "a relief to the industry".

"The postponement will allow for employers to plan and adjust for the transition," said Foo Chek Lee, president at MBAM.

Additionally, Datuk Paul Low, minister in the prime minister’s department mentioned that there are plans to amend the Employment (Restriction) Act to increase the penalty of those caught hiring illegals to as high as RM100,000 for every illegal found in their employment.

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